An expense account is a financial allowance offered to employees to cover business expenses. Employees pay for business related goods and services with the understanding that they will be reimbursed. This makes it easier for personnel who travel and/or entertain clients to conduct business that helps your company grow. It is in your company’s best interest to establish a clear expense policy, share it with your employees and then regulate it often and fairly.
Write an Expense Account Policy
Take the time to write a complete and comprehensive expense account policy.
- Use clear and precise language to avoid misinterpretation or confusion.
- Divide the policy into sections for easy and quick reference.
- Itemize carefully what is allowed and what is not allowed.
- Include details regarding expected rates, limits, what requires preauthorization, when receipts are needed.
- Use examples to increase clarity.
- Take into account all possibilities; accommodation, travel, mileage, food, alcohol, entertainment, business purchases, subscriptions, donations, computer hardware, software, equipment, etc.
Once the policy is complete, make it available to employees and management. Consider a hard copy and a copy online. Make time for questions and feedback. Continually review and refine the policy.
Develop an expense report and reimbursement process
A strong expense report procedure will speed the process of reimbursement and reduce expense leakage.
- Create an expense report template which requires all pertinent information; date of purchase, category (i.e. accommodation, food), amount, point of purchase and preauthorization (if required).
- Consider separate templates for each department customized to their needs.
- Generate a separate mileage template for travel.
- Reimburse purchases and expenses quickly checking them against the policy.
- Set expense deadlines and compensate staff on their payday.
- Manage employee expense accounts online to save time and paperwork.
Document your expense report process and include it with the expense account policy. Field questions and assist employees in learning to navigate the process with ease.
If your company’s personnel spend money for work purposes, establish a comprehensive expense policy, create templates, monitor the claims process and adjust as needed. A clear expense process creates trust and respect.
Cook and Company Accountants offer specialized skills in business accounting and asset management, provide expertise in tax planning strategies and can assist you in retaining the value of your company’s estate. Our team of chartered professional accountants are dedicated, knowledgeable and experienced and will provide a personal touch. Contact us for a complimentary consultation.